Australian bond futures prices are higher as concerns over the Cyprus banking system caused investors to move funds into safe haven assets.

UBS interest rate strategist Matthew Johnson said the strength of the Australian bond market suggested there were flows of capital out of Europe and into the Australian markets.

He said US Treasuries and Australian bond futures had a good overnight session and the local bond market was also encouraged by a popular Australian Treasury bond tender.

"The current strength of the currency and in the bond market tells us something about capital flows out of Europe," Mr Johnson said.

"It just seems bonds have got good support at these levels, we've been around at them for a while and it struggled to break meaningfully lower in price."

In the past week, there has been renewed nervousness about the euro zone financial system, with the Cyprus government facing bankruptcy, a possible exit from the euro and two of its biggest banks failing.

At 1630 AEDT on Wednesday, the June 10-year bond futures contract was trading at 96.470 (implying a yield of 3.530 per cent), up from 96.405 (3.595 per cent) on Tuesday.

The June three-year bond futures contract was at 97.020 (2.980 per cent), up from 96.950 (3.050 per cent).

Mr Johnson said Australian markets would be focused on any further developments in Cyprus and over the Easter long weekend.

There is also interest in next week's Reserve Bank of Australia board meeting, where it is widely expected to keep the cash rate unchanged at three per cent.